Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Broadwind Inc (NASDAQ:BWEN) delivered its seventh consecutive profitable quarter, demonstrating strong operational performance.
• The company saw a 45% increase in orders year-over-year, driven by demand across all reporting segments.
• Broadwind Inc (NASDAQ:BWEN) has successfully implemented targeted cost reduction actions, contributing to over $4 million in annualized savings.
• The company is investing in innovative technology to improve process capabilities, reduce costs, and enhance profitability.
• There is strong demand in the industrial solutions segment, particularly in the global gas turbine market, with quoting activity tripling year-over-year.

Negative Points

• Q3 revenue declined due to a significant drop in wind tower demand, impacting overall financial performance.
• The gearing segment experienced a 19.6% reduction in revenue year-over-year, primarily due to softness in the oil and gas market.
• Industrial solutions revenue decreased by 22.8% year-over-year, affected by the absence of a large international project from the previous year.
• The company anticipates a meaningful increase in operating working capital and temporary borrowings in Q4 due to higher inventory levels.
• Broadwind Inc (NASDAQ:BWEN) continues to face challenges in the oil and gas sector, with ongoing softness impacting order levels.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with BWEN.

Q: How has your view on the wind business changed compared to a quarter ago, and what impact does the election outcome have on your outlook for 2025 and beyond? A: Eric Ashford, CEO: My optimism has improved slightly. The election outcome is not expected to impact Broadwind significantly, as our wind business benefits both sides of the aisle. The election's completion might bring some relief, but it won't affect our operations in the near or medium term.

Q: Do you expect 2025 to be a year of order recovery, setting up for 2026, or do you see strong potential for 2025 itself? A: Eric Ashford, CEO: We have good visibility into our wind turbine tower production through the first three quarters of 2025. We expect 2025 to be similar to 2024 in terms of volume, with some uptick. We anticipate more activity towards Q3 and Q4 of 2025, preparing for increased volume in 2026.

Q: Can you provide more details on your offerings in the power generation sector outside of wind? A: Eric Ashford, CEO: Our Industrial Solutions segment primarily services combined cycle natural gas turbines globally, providing supply chain solutions, light manufacturing, and panel manufacturing. This market is strong, with some customers publicly stating they are sold out for the next five years.

Q: What are your strategies for revenue growth outside of the wind segment? A: Eric Ashford, CEO: We focus on improving process capabilities, obtaining quality certifications, and enhancing commercial outreach. We've invested in process capabilities and quality certifications like AS 9100 for aerospace. We've also strengthened our commercial team to leverage these capabilities and qualifications, resulting in increased RFQs.

Q: How do you see the oil and gas sector evolving, especially with the new administration? A: Eric Ashford, CEO: The oil and gas sector remains soft, but our customers are considering placing orders for fracking pumps. The election outcome is expected to positively impact this sector, aligning with our customers' expectations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.